Recent Automation Trends in Portugal: Implications on Industrial Productivity and Employment in Automotive Sector

Recent developments in automation and artificial intelligence (AI) are leading to a wave of innovation in organizational design and changes in the workplace. Techno-optimists even named it the “second machine age,” arguing that it now involves the substitution of the human brain. Other authors see this as just a continuation of previous ICT developments. Potentially, automation and AI can have significant technical, economic, and social implications in firms. This paper will answer the following question: What are the implications on industrial productivity and employment in the automotive sector with the recent automation trends, including AI, in Portugal? Our approach used mixed methods to conduct statistical analyses of relevant databases and interviews with experts on R&D projects related to automation and AI implementation. Results suggest that automation can have widespread adoption in the short term in the automotive sector, but AI technologies will take more time to be adopted. The findings show that adoption of automation and AI increases productivity in firms and is dephased in time with employment implications. Investments in automation are not substituting operators but rather changing work organization. Thus, negative effects of technology and unemployment were not substantiated by our results